Hedge funds are mediocre investments imo. And they have become the market. Maybe has helped the small investor with volatility and we can invest in smaller cos that they can't begin to buy. Same could be said for private equity, has become too big to really outperform the market. We should be beating the market every year and you don't have to give up 2 and 20% or whatever the going rate is currently. They all want to go public now. Buyer beware.
Calpers eliminating hedge funds from their investment mix, $4 billion reallocated. My guess is this becomes a trend. Too much money, too little op for the couple of trillion in funds. Has taken some volatility out of the market.
Don, thanks, interesting data. I think the best geology should prevail, not a revelation but still think PDCE with Wattenberg, 70% returns and Utica Condensate and Wet Gas, as much as or up to 100%, has to do well. Those two plays are at the top of the returns list, along with the super Marcellus. NBL for the same reasons, Wattenberg and Utica, and some offshore and international, well run company. GPOR also a good bet. For the Permian, you could probably cover it with PXD. But I almost bought AREX today, the returns aren't as good as No Midland but terribly cheap, same for EPE. Still like SN for the EF and TMS. You know the Bakken a lot better than me but OAS is well run. And then you have EOG, which would cover a bunch of plays, ex the NE. I'm fully invested, actually 103% long. But it's the infrastructure plays primarily, you don't have quite the volatility as you do with the e and p s. Bought more PAGP for a sector consolidation. Have been thinking about KMI, where can you find a 5%+ yield on next year's div and growth the co projects at 10% per year to '20. And if we do have LNG exports and supply shortages, KMI's pipe franchise will make a fortune. Also have been buying CEQP, they will hook up with someone, a la Crosstex. My favorite is still Williams but I own too much of it, 15% div growth for the next few years. And Range at some point will print money when gas prices respond to LNG exports, but that could be a few years away.
Thinking about the abundance of nat gas in this country and the supply, demand balance over the next few years, not sure that KMI isn't the best bet to play this growth. Their pipe network is the best, good management and it will pay $2 div next year, 5.2% yield. And they have a great CO2 business. DNR doesn't measure up to KMI's opp. I would bet that at some point KMI spins the COs business in an MLP. Smart management that isn't sitting on its rear, DNR???
Don, from a Forbes article just out. You can google the whole thing but sounds fairly bullish, calls it compelling. 400 to 2500 units should make it a great long term bet. I'm high on the menu and food and it really doesn't have a close competitor. A sit down fast casual that's fairly healthy.
Noodles’ enterprise multiple is 10.3, nearly its lowest point since the company’s IPO. However, calling the company “one of the best growth stories in the restaurant sector,” Siegner said that not only is it a compelling value (in light of the company’s long-term earnings targets), but it’s also a value that isn’t consistent with the
company’s unit growth. Noodles’ 14% unit growth and 10.3 enterprise multiple compares favorably to Chipotle’s 12% growth and 21.3 multiple, Burger King’s 5% unit growth and 17.7 enterprise multiple and Sonic’s 1% growth and 10.5 multiple.
I think your comparison to DNR is a good one, DNR is a mid $20s value, but they've billed themselves as a yield play, that doesn't work imo. KMI is yielding 5% on next year's forecast.
This slide in oil could continue for a while. But it wouldn't take much to reverse it. The lack of a market here is a problem for WTI.
Birdog, EXXI looks really cheap at $14.50. PV10 value is $7.2 billion vs $5.2 billion EV. Lots of potential, 75% oil. Would you buy them again. Probably have to hold a couple of years. Just appreciation to PV 10 no gets you a $30+ value.
Don, clouds have parted and there is snow on the mountains, Trail Ridge Road is closed. Forecast to be 30 degrees tomorrow. Aspens are turning and the elk are beginning to do their thing.
Don, didn't see that, thanks. I've decided to stay with it long term. They need a good report this quarter, same store sales need to be positive, 2% range for it to keep moving, imo.
Looked at an interesting report on nat gas supply/demand to '20. NE supply has gone from 5bcf/d in '12 to projected 32bcf/d in '20. Pipes don't catch up with supply until '17. But project 90bcf/d supply in '20 and 5bcf/d potential shortage. The rest of the country demand is growing 3x the supply growth in the NE. LNG, exports to Mexico and Canada, power generation. $100 billion of export, chemical projects on the GC to '20, 85k jobs building the facilities. The ng infrastructure cos should do well for a few more years. And the oil infrastructure cos as well. The US gas discount to global prices is 1/3 of the trade deficit. Still think this revolution is as big as the social media, Apple/smart phone phenom and maybe more long lasting. Still think Williams might be one of the easiest bets on this growth, and it yields around 4% now. EPD, KMI, ETE will be continue to be winners as well.
CS put out a note on ALJ, expects approval of rail loading facility at Bakersfield. Sum of parts value $24 after. With advantaged crude price, ALJ looks like a fairly good bet for next couple of years.
Birdog, NRP has a small frac sand op in Tyler but I don't think it moves the needle, coal and soda ash mainly. Read a comment this week that each horizontal well requires 50 train cars of sand. The railroads are probably making as much as the sand suppliers, and the logistics, the piece said its hard getting supply. I do thing there is an MLP that is primarily sand, but don't remember the name. The trucking industry needs 40k drivers, saw that the maritime industry is projecting shortages. Those do indicate the economy is doing well and the unemployment issues are maybe more structural than absolute. I don't think focusing on the jobs number is that meaningful anymore, important maybe but not critical. If the Fed does focus on it, could lead it to the wrong policy maybe???
Don, ate at Noodles in Boulder yesterday around 2 pm, good traffic for mid afternoon. And the food was outstanding. I decided that I'm going to buy more but not in any hurry. I think it's a great concept, good healthy food and good price points but more fast casual than fast food. Did see a couple of people walking out with bags of the catered product, lots of promotion in store for catering, $12 per person for full course meals. I don't think NDLS is going away, just going to take longer to establish the brand and not sure they have a good competitor.
Don, thanks for the CNBC posting, I thought it was just me. I can barely watch it without disgust. Noticed they have moved the morning group to a Manhattan location, I guess looking at Times Square makes them more relevant. Maybe once a week, they interview someone worth listening to.
Birdog, no doubt, shales are not specific to the USA. The source rocks are around the globe. And seems they will be explored eventually. Things we have as advantages are great infrastructure, a close market that still imports 40% of its oil use, a good rule of law, private ownership of minerals. That last issue prevents efficient development in most place, Argentina comes to mind, the Vaca Muerta supposedly is a world class shale. I agree with you, we have the resource potential to truly be independent here in NA. China would have built several Keystones by now. Talked to an Exxon exec this past weekend, and he said horizontal exploration of US source rocks could continue for decades. The Permian Basin is the next Saudi Arabia, that claim used to be hyperbole, not too far fetched anymore. Just scanned a article about nitrogen foam in EOR, recovering maybe 70% of OIP vs single digits. I suspect fossil fuels will be supplying energy long after we're gone.
Read a comment that Shell's Utica wells could have a $2/mcf break-even point. I don't see how gas prices rise much in the next few years. Could be an issue for oil until we export or reconfigure refineries. The refiners could still be advantaged???
Couple of data points, ECB lowers int rate, still fighting deflation. Shell announced a couple of discoveries in the Utica that are 100 milles from the nearest wells, 11mm and 26mmcf/d initial rates. Seems the area could get overrun with gas production. Again, I can't see how nat gas gets much higher than current levels for a long time. And oil is overrunning the Permian as well. Interesting times.